The Bankruptcy Venue Reform Act seeks to limit "forum shopping" in large corporate bankruptcy cases by restricting where companies can file for Chapter 11 bankruptcy protection. Currently, companies can file bankruptcy in multiple districts, including where they incorporate or where affiliates have filed cases, which has led many large corporations to file far from their actual home locations. The bill would require bankruptcy cases to be filed in the district where a company's principal place of business or principal assets have been located for at least 180 days before filing, with specific rules for publicly traded companies that look to their last annual SEC filing to determine location. The legislation also closes loopholes by preventing companies from artificially changing their location within a year before filing and by requiring courts to dismiss or transfer cases filed in improper districts within 14 days. The bill is intended to ensure bankruptcy proceedings happen closer to affected employees, communities, and creditors, while giving more district courts the opportunity to develop bankruptcy law rather than concentrating cases in a handful of courts.
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